Connecticut insurers defend rate hike requests during public hearing

The department invited representatives of Cigna and ConnectiCare, the companies seeking the largest increases, to explain and justify those requests before enduring more than five hours of questions and statements by public officials and Connecticut residents. Regulators at the department will ultimately decide whether the carrier requests are reasonable.

Andrew Mais, commissioner of the Insurance Department, said the agency would conduct a thorough review before arriving at a determination.

"This is not 'send it to us and we will rubber stamp it.' This is not a 'we will accept your assumptions,'" Mais told the industry representatives. "We will do what is best for consumers … so the rates, and this is our charge under law, are not excessive, they're not inadequate, and they're not discriminatory."

During the hearing, representatives of both Cigna and ConnectiCare argued that their rate filings were appropriate given trends that have included rising health care costs and more patients utilizing services and treatments delayed during the COVID-19 pandemic.

Wendy Sherry, vice president of Cigna's U.S. commercial markets, said the company's premiums would be lower than the market average even if the department approved Cigna's requested 19.6% increase on small group policies.

"Percentage increases are all relative to the base figure and as such, while we may have among the higher proposed increases, we continue to have among the lowest actual out-of-pocket premium cost when all is said and done," Sherry said.

Meanwhile, representatives of ConnectiCare, which has proposed an average increase of 24.1% on its individual exchange plans, said the rate hike would be necessary to help the company withstand over $65 million in losses over the past year and is required to keep pace with rising healthcare costs.

"For an insurance program to be sustainable, rates must be adequate to provide for payment of claims and the administrative cost of running the program," Karen Moran, president of ConnectiCare, said. "For the past year, the total insurance premium that we have received is far less than we have actually funded."

However, regardless of the reasoning that led to the requested rate increases, a parade of elected officials and advocates for patients and consumers argued that Connecticut residents simply could not afford such hefty price hikes in the current climate.

Attorney General William Tong asked Connecticut's insurance commissioner to stop the hearing so another, more formal proceeding could be scheduled in order to question industry representatives under oath. Mais denied Tong's request.

Instead, Tong questioned whether anyone at the two companies considered whether their customers had the ability to pay for their proposed price increases.

"Who in your company … asks that question, whether your customers can afford to pay these increases?" Tong said.

Moran said ConnectiCare was sensitive to affordability and would remain among the lowest-priced plans available, even if the rate increase is eventually approved.

"We have to keep looking at the underlying cost of health care and have a broader conversation around the prices that we are charged, which are then reflected in our rates," Moran said.

Healthcare Advocate Ted Doolittle said he hoped another hearing, scheduled for Oct. 3, would shed light on the underlying cost of health care.

"I'm not directing my comments to the insurance industry solely. Most of this money… goes to pharma, it goes to the providers," Doolittle said. "They should be here to justify the prices that they're not only making you carriers pay, but that they're making us and our neighbors and families pay because most of the families, as you know, never even hit their deductible."

Several speakers during Monday's hearing had a difficult time squaring the requests for more money from insurance ratepayers with the record profits made by some insurance companies.

"Of the nine insurance companies seeking increases, five of the companies saw billions of dollars in profits, stock buybacks, and executive compensation that ranges from $17.3 million to $91.1 million in CEO compensation," Rep. Kate Farrar, D-West Hartford, said. "How can you substantiate the double-digit increases that we're seeing for workers and families when the company CEOs are making millions a year?"

ConnectiCare is not a publicly traded company and lost money in 2021 and expected to experience losses this year as well, Moran said. Sherry said much of Cigna's profits were from the company's other markets globally. Cigna's profits related to its rate request were modest, she said.